“We saw a mixed trading performance in the first half of the year. We made good progress with our strategic priorities, continuing to invest in the business and our people to drive sustainable long-term growth. During the period we focused on controlling the controllable: we delivered significant supply chain savings, successfully transformed our North American distribution network, opened 25 new stores, and launched a Dr. Martens UK repair service (…)”, commented Kenny Wilson, Chief Executive Officer of Dr Martens. “We saw a continued strong DTC performance in EMEA and APAC”, but “in the USA, where there is an increasingly difficult consumer environment, our results have been more challenged, led by weakness in wholesale”.

First Half Results

In the first half of fiscal 2024, the company’s revenue decreased by 5% (or by 3% at constant currency), totalling 395.8 million British pounds (461.7 million euros), on a comparable basis to the same period of last year. This result was mainly driven by a weakness in the US wholesale environment.

In these six months, Dr Martens’ DTC revenue was up by 9% (or by 11% at cc), reaching 50% of total sales, as compared to 43% in the first half of fiscal 2023. Within DTC, retail revenue increased by 15% (or by 17% cc) year-over-year and e-commerce revenue was up by 3 (or by 5% cc) %  year-over-year. Meanwhile, wholesale revenue was down by 17% (or by 15% at cc) year-over-year.  

At the end of September, the company's revenue in the Americas region amounted to 147.7 million British pounds (172.3 million euros), declining by 9% (or by 18% at cc), on a comparable basis to the same months of the previous year. In the APAC region, its revenue also decreased by 10% (or by 3% at cc) to 53.9 million British pounds (62.9 million euros), “due to the planned exit of the distributor contract in June”. In the EMEA region, however, Dr Martens recorded a first half revenue growth of 9% (or 8% at cc) year-over-year, amounting to 194.2 million British pounds (226.5 million euros).  

In the first half of the current financial year, the UK-based company’s EBITDA declined by 13% to 77.6 million British pounds (90.5 million euros), on a comparable basis to the 88.8 million British pounds (103.5 million euros) registered in the same period a year ago; the EBITDA margin narrowed accordingly to 19.6%.

In addition, Dr Martens’ first half pretax profit halved to 25.8 million British pounds (30.1 million euros) from 57.9 million British pounds (67.5 million euros) in a similar period of fiscal 2023, whereas net earnings amounted to 19.9 million British pounds (23.2 million euros), as compared to net earnings of 44.7 million British pounds (52.1 million euros) recorded in the first half of the prior year.

Fiscal 2024 Guidance

Given the challenging consumer environment experienced in the US in recent months, Dr Martens is now expecting “that it will take longer” than anticipated to see improvement in the region. “The most challenging part within our USA business is wholesale, with widespread macroeconomic caution amongst our wholesale customers resulting in a weaker order book than in prior years”, it added.

Therefore, the company anticipates recording a high single-digit percentage decline in revenue at constant currency rates at the end of March. Based on this assumption, its full year EBITDA is expected “to be moderately below the bottom end of the range between 223.7 million (260.9 million) to 240.0 million British pounds (279.9 million euros), with its pretax profit taking a hit of approximately 5 million British pounds (5.8 million euros).